Financial industry representatives have revealed that YG Entertainment is likely to pay back the money invested by LVMH five years ago.
In October 2014, LVMH Moët Hennessy – Louis Vuitton SE (hereafter LVMH) invested 61 billion won (approximately $51.6 million) in redeemable convertible preference shares (RCPS) of YG Entertainment. At the time of investment, LVMH set the option of converting into common stock at 43,574 won (approximately $36.83) per share or a repayment of 67 billion won (approximately $56.6 million), which includes annual interest, after five years.
If YG’s stocks are priced higher than 43,574 won per share, LVMH can profit by converting into common stock. However, following recent controversies surrounding the company, YG’s stock prices have continued to fall, priced at 23,500 won as of September 15. As a result, financial industry representatives predict that LVMH will choose to receive the repayment of 67 billion won on the set five-year date of October 16, 2019.
According to Etoday, the National Tax Service will charge Yang Hyun Suk and YG Entertainment additional fees of approximately 6 billion won (approximately $5.1 million).
The National Tax Service conducted a special tax investigation on Yang Hyun Suk and YG Entertainment for approximately six months starting this March until late August. After wrapping up the investigations early this month, the National Tax Service decided to charge additional fees that total up to 6 billion won (approximately $5.1 million). The amount includes corporate taxes and income taxes.
The sum highly exceeds the amount YG Entertainment was fined after their past tax investigation in May 2016, which was approximately 3.4 billion won (approximately $3 million).
However, Yang Hyun Suk and YG Entertainment were not fined for suspicions of tax evasion. It appears that the National Tax Agency did not find any clear evidence of tax evasion during the investigations.
A source from an inspection agency said, “The 4th Investigation Bureau of the National Tax Service Seoul Regional Office carried out a special tax investigation for six months, and they switched to a tax crime investigation in the middle of it, indicating that they were considering the possibility of reporting to the prosecution.”
The source continued, “While the taxes charged aren’t a small amount, it isn’t a huge sum in comparison to the size of YG Entertainment’s revenue. Charging additional taxes without actually reporting anything to the prosecution is like a clamorous, but insignificant report card.”
A source from the National Tax Service stated, “I do not know anything about the tax investigations on Yang Hyun Suk and YG Entertainment. Even if I did, it is not something I can talk about.”
Meanwhile, Yang Hyun Suk is currently also being investigated by the police for suspicions of gambling and prostitution mediation.
source: soompi 1 2 3 4, Sports Hangook, etoday